BAH, otherwise know as Basic Allowance For Housing, is paid monthly to eligible service members, and shows on the Leave and Earning Statement (LES) of the service member. The BAH, and other types of entitled income showing on the LES that a service member might be receiving, is what lenders can use to calculate an actual monthly income a borrower can spend on housing each month.
The eligible service members, BAH rates vary by rank, dependent status, assigned permanent duty station, and longevity. Also, a service member’s pay rate may be higher if they are receiving a Cost Of Living Allowance (COLA). COLA is a cash allowance intended to enable an equitable standard of living in areas where cost of living is unusually high. Members permanently assigned to designated areas receive this entitlement.
Any adjustments made to the rates of BAH take effect on January 1st of every year. If you would like to spend less on housing than what your eligible BAH rate is, you will have extra money each month that can be applied towards other expenses. On a different note, if you decide to spend more on housing than what your eligible BAH rate is, you will be required to make up the difference. Call one of our certified Military Housing Specialist at 1.855.940.HOME to get started.